No More Freebies: A Guide for Over Generous Artists & Other Entrepreneurs

11 FEB 2013

First Rule for Startups: No More FreebiesBeing something of a people person and a philanthropist by nature, I’ve always been a fan of cooperative action. So when I see working artists and other entrepreneurs helping one another I’m usually pretty jazzed.

Or at least I used to be.

But I’ve noticed these friendlier folk do not always (or often) do as well as their more selfish brethren and I’ve been looking into why that is. At root the problem seems to be that some of these folks confuse being “helpful and generous” with being good at business. After all many people who are good at business are very philanthropic.

But, as Doug Richard says, “We do good because we do well.”

There are certainly times when it makes sense to do work at just above cost for someone, and certainly reasons why you might elect to share an opportunity with a friend, but it almost never makes sense to do a deal that does you and your business harm while it helps someone else.

For some people this is just common sense, but a surprising number of creative professionals and would-be small business owners just can’t understand why ever doing things for free is a problem.

The hard fact is, every business, even one run by an artist, has to earn enough to pay its bills or it won’t be a business for long.

Tip: If you are starting a creative enterprises and are looking for active training, mentoring, support and networking to help ensure your success. Check out School for Creative Startups.  Get a full year of training from Doug Richard and his team.

If something costs you time and money to create and you give it away in order to be nice, what you have given away isn’t free. It is a cost that will actively harm you and your business. If you squander your resources and your energy in things you do to support others you are making an active choice not to support yourself with your work.

It is that simple.

The following guidelines can help the overly helpful and generous chart a course to a more successful enterprise. You’ll be surprised how much more successful you are and how much more free time you have when you begin following these rules.

Abandon the “free” economy. Make it a hard and fast rule that you do nothing for free and you accept nothing from any artist or entrepreneur you care about for free. Everyone can afford to pay for what they want in some coin, if not in cash then in time or connections made and opportunities created.

Be prepared to explain this logic to anyone who asks you to do something for free and to explain it to anyone who offers you something for free. It really is quite simple to say “I think freebies are bad business and bad karma”, as long as you are prepared to explain your thinking immediately thereafter after.

Document all cash and non-cash deals in writing. Never commit to doing anything without an agreement for a quid pro quo in place. Simply negotiate what you’re going to do face to face or on the phone. At the end of the conversation say “I’ll send you an email to confirm.”

In the follow up email concisely outline who is doing what and what they are getting in return in terms of time, money, connections or opportunity. Limit how long the deal will last. Unlimited deals without real contracts are almost always an expensive disaster. Ask for a written confirmation by return email before anyone starts work.

If you don’t get that confirmation you can let the “deal” die without feeling like you’ve done something bad or the other guy has a reason to be mad at you.

In the real world, entrepreneurs often explore business ideas together and then step back from them when the fit isn’t good upon further consideration. No harm, no foul.

However, if you do get a confirmation and follow through faithfully on your end while your “partner” shirks there end for no good reason, never work with them again. Those folks have stolen your time and effort and they are actively bad for your business.

Do small deals before big deals. Don’t agree to do a big project or undertake anything that is very important with any individual or organization until you’ve worked with them on something small first. Particularly never work on a huge project on a “trial basi” until you’ve done something smaller first.

If a person or company can’t handle working with you on a small self-contained project, they won’t be able to follow through on a big one. You may sell cufflinks and your potential partner may sell tailored white shirts. You may see a perfect opportunity in doing markets, trade shows and other events together. But your first step is to start very small event first.  This is true even when you can afford to book twenty events up front. Because in the joys and sorrows of that single gig will often be found the seeds of greater failures or successes. This is the fastest way to iron out problems before you “go big” and to sidestep people who are all talk and no action before you waste a lot of time on them.

Continue to look for cooperative opportunities. Contrary to what you might expect, following the “No More Freebies” rule actually increases the number of cooperative deals you do.

That’s because each deal you do decide to do is good business. People will take your calls because the deals you bring them are clear cut and sustainable.  When they want a good partner for some deal they want to do, you’ll be the one they call because they know you will come through on your promises.

Cash doesn’t always have to change hands when you do a deal, but something that turns into cash must be exchanged. You may elect to give a large charity one of your designs for free in return for the right to put a link back your website on every single item they sell. They get something unique to produce and sell in perpetuity, you get massive exposure and visibility. You may elect to take a friend’s work to a tradeshow for no cash up front from them, but you can can take 40% of each sale you make for them on the exhibit floor. That’s fair because you’re giving them not only revenue but time to work on something else they can sell.

Survive to Thrive

If you want to become or remain a working artist, or start a business that can survive and prosper in the real world, you have to protect and grow the time, money, energy and resources your work depends on. To do anything else is to ensure your failure and your return to working for people do will run a business without asking for or offering favors.

Following these guidelines doesn’t mean becoming hard hearted, grasping, stingy, difficult to approach or unfriendly. Just the opposite. It requires you to become more honest, more courageous, more cooperative, more creative and more focused on the benefits you business delivers to you, your customers and your creative partners.

You’ll be startled at just how much easier things get for you and your business when you abandon a “something for nothing” world.